I have a problem with the Default Theme plugin (and the same problem occurs with the signup-blog-description plugin.
When I'm logged in and I create a new blog - they both work like a charm!
But........ when I am not logged in and create a new user and add a blog in one go, I get an e-mail to activate my blog.. but when i do the blog is created and has the standard Twenty Ten template...! The blog then also has the standard tagline.
I am using WP3 multisite (without buddypress)
It would be user friendly to enable users to create a blog in one go rather than creating a user, then signing in and creating a blog.